Yep, I think that's why they have the discount night Tuesdays and Wed (? or is it Mondays?) instead of just one day of the week like the rest of its cinmas. I went once, and really like it there though
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Wednesday » June 15 » 2005
Cinema giants merge
Onex's Cineplex swallows Famous Players, giving company 1,300 screens nationwide
MARY LAMEY
The Gazette
Tuesday, June 14, 2005
CREDIT: ALLEN MCINNIS, THE GAZETTE
Not a bidder Guzzo unlikely to buy excess theatres: Vincent Guzzo, who opens a cinema in Marche Central on June 28, isn't interested in any theatres made available by yesterday's merger.
Canada's two largest cinema chains are joining forces, with Cineplex Galaxy LP swallowing larger rival Famous Players for $500 million, a deal that will consolidate Cineplex's grip on movie screens across the country.
The purchase will give Cineplex, a unit of turn-around king Gerry Schwartz's Onex Corp., 1,300 screens in 132 theatres nationwide and a 63-per-cent market share. It also will relieve U.S. media giant Viacom Inc. of an expensive Canadian headache. The sale has been rumoured for months.
The deal comes at a price, however. Before giving the transaction its blessing, the Competition Bureau of Canada told Cineplex to sell 35 theatres in markets where the two chains compete. They include Gatineau, Quebec City, Montreal and 14 other cities.
"Given the degree of concentration in the industry and the barriers to entry into the market, it is essential that these theatres be sold off to ensure that this merger does not result in a substantial prevention or lessening of competition," said Gaston Jorre, the Competition Bureau's senior deputy commissioner of competition.
There is speculation that among those to hit the auction block will be Cineplex's outlets in Cote des Neiges, the Cavendish Mall, Delson and Dorion, as well as Famous Players' Place Versailles and St. Bruno cinemas.
Finding buyers for the local theatres might be difficult, said one player who already has decided to take a pass.
"We looked into buying Famous Players in Quebec." said Vincent Guzzo, president of Cinemas Guzzo.
"In the end, we didn't have the guts," Guzzo said.
Guzzo is putting the finishing touches on his 12th theatre complex, an 18-screen, 4,400-seat megaplex in Marche Central. The cinema is scheduled to open June 28.
"If Famous Players, with all the big money Viacom had to throw at it, couldn't make those theatres work, what hope do I have?" Guzzo asked.
AMC Entertainment International, Canada's other established exhibitor and owner of the 22-screen theatre at the Pepsi Forum, is said to be looking for a graceful exit from the market. The Kansas City-based chain was privatized last year after being acquired by investment firm Marquee Holdings Inc. for $2 billion U.S.
The merging of industry giants does not worry Guzzo at all. He has allowed Famous Players and Cineplex to duke it out for downtown market dominance, choosing instead to focus on suburban theatres with lower rents and plenty of room for parking.
"Now instead of having to point my guns at two competitors, I can point them both at one," he said during a tour of his newest theatre.
"The problem with these guys is that they tried to buy their way out of their problems. The locations they chose were so expensive that they had to grab 100 per cent of the market just to survive. They jacked their ticket prices up, but you can only do that so long, before the public begins to complain."
In a conference call with analysts, Ellis Jacob, CEO of Cineplex, said management is confident that it will be able to realize substantial synergies once the transaction is completed.
Anticipating the unease the creation of such a dominant market force will cause everyone from the ticket-buying public to landlords and the Hollywood studios, Ellis sounded conciliatory.
"At the end of the day, this acquisition would not work if we don't have our partners on side."
Famous Players, soon to celebrate its 85th birthday, has 81 theatres and 787 screens. In 2004, the company had revenues of $520 million. Cineplex Galaxy operates 86 theatres and 775 screens. It had revenues of $354 million last year.
Units in Cineplex Galaxy Income Trust Fund, traded on the Toronto Stock Exchange, rose 15 cents to $14.35.